No longer in stealth mode, MachineShop is vowing to simplify and standardize the way organizations, people, systems and applications interact with one another -- and it won $3 million from strategic investors to forward its mission. Noteworthy is how this startup is taking a new perspective on the Internet of Things.

Rather that just looking at how tens of billions of devices physically connect to the Internet, MachineShop, a Boston-based tech startup, is focusing on the trillions of data transactions and interactions that take place through the Internet of Services, which is the domain where communications happen through standard services or application program interfaces (API) as opposed to middleware, legacy platforms or proprietary protocols.

We caught up with Zeus Kerravala, principal analyst at ZK Research, to get his take on the concept. He told us connecting people, businesses and other things isn’t just going to happen.

“Making these connections is not magic,” Kerravala said. “What’s interesting about MachineShop is that it connects the unconnectable things. Now that this company is no longer in stealth mode, it will be interesting to see where it goes from here.”

Trillions of Transactions

MachineShop brings together the rampant adoption of APIs with the increasing number of connected systems and associated data sources to make it possible for developers and their applications to take advantage of what the company describes as standard, discrete, purpose-built services.

Here’s how it works: MachineShop's APIs individually normalize interfaces to connected things and serves up a set of business logic, event management and communications services for developers building and integrating solutions. Customers are exposed to these API interfaces through public or private services exchanges. Think of it like a private API store that offers authenticated, metered and managed access despite where they are hosted.

The company seems to be on to something. According to market research firm Gartner, Internet of Things vendors will top $309 billion in direct revenue by 2020, with most of that money stemming from services.

"There are few market opportunities that can be measured in trillions of transactions, but the Internet of Services is one of them," said Michael Campbell, CEO, MachineShop. "Not only is the Internet of Services bigger than the sum of all the connected devices in the world, it's more valuable financially to enterprises, developers, hardware vendors and ultimately to the consumers of all things connected."

A Flexible MachineShop

MachineShop’s new investors are CSR, security company Diebold, Incorporated and Xchanging. Diebold's SecureStat, a Web-based security system management tool that unifies disparate systems and services via a single user interface, relied on MachineShop to make the connections.

"Diebold has a deep commitment to leveraging emerging technologies to deliver differentiated products and services to its customers worldwide," said Tony Byerly, Diebold executive vice president, Electronic Security. "MachineShop has been an important partner for our security business in supporting our services-enablement strategy, and we are enthusiastic about their future."

MachineShop’s Services Exchange offering may catch on with developers because it’s flexible. It’s not a platform, so developers can use any programming language to build on top of it or integrate systems with it. CSR, a designer and developer of silicon and software for the consumer electronics market, bet on MachineShop because it believes the Internet of Things will not be built around products alone.

“As the market evolves, services will become increasingly important, and MachineShop understands that aspect of the market," said Will Gardiner, CFO of CSR. "We are investing in MachineShop because its technology eliminates complexity by simplifying and standardizing the way information is managed so that physical and virtual assets and services can work together in one integrated system."